Saturday, May 19, 2012

A Short Sale and an Object Lesson

This is an interesting story because it demonstrates just how out of touch the Congress is with what is going on in America.

If you're Senator Mike Lee, dumping your home in Alpine, Utah isn't about being caught up in a bad housing market. It's about getting rid of a property that is dragging you under before the lucrative paydays of being a United States Senator can start arriving.

Read this part of the article and try to keep from guffawing:
The state’s newest senator ended up in a "short sale" — in which a mortgage holder and bank agree to take a monetary hit to sell the home — after Lee was elected to the Senate and left his law firm, Howrey L.L.P. 
Lee said he knew he had to sell his home if elected because he went from a salary of several hundred thousand dollars a year to the Senate payroll of $174,500. But he thought improvements to the home and a rebound in housing prices would help. Failing that, he was owed a large sum, he says, from Howrey that could provide a "cushion." 
But then a neighbor’s home went through a short sale, dropping home values on the street, and Howrey filed for bankruptcy, leaving Lee with little option other than to persuade the bank to take a loss.
Correct me if I'm wrong, but going from an income of "several hundred thousand dollars" to $174,000 doesn't exactly mirror the American experience right now, does it? Those are choices people are certainly faced with in a few rare instances, but how many of them are looking at the potential earnings of having their fingers on the levers of power?

Lee obviously had a choice as to whether or not to maintain ownership of his dream home; he chose to dump it because it was losing value. How he believed that "improvements" to the home would help him pay his bills is beyond ludicrous to believe. How does improving a property lower the mortgage? That sounds like a sad-sack lie in order to make people ignore the fact that he calculated that a Senate seat would propel him out of Utah and far beyond what he could have achieved as a lawyer.

Lee ran for the Senate and bailed on his law firm because being a United States Senator is one of the most lucrative scams going. He, literally, grew up amongst Senators and was raised in McLean, Virginia amongst the politically connected (his father served in the Ford and Reagan Administrations). It's that simple. He knew several years ago that he would end up taking a hit--but he probably also knew that his law firm was on the ropes and he needed to find something else to do in order to maintain his cash flow. I don't know--but it sounds suspect to me. So, why not return to Washington D.C. and cash in on being in Congress? Sounds like a smart move to me. Dumping his "dream" house was smart as well. Who needs a money pit back home when your real home is in the leafy suburbs of Washington D.C.

Communities all over America are vulnerable to the housing market and it's not just about short sales. Abandoned homes litter the American landscape. Empty, blighted properties are driving down property values everywhere. The people who live there are seeing their incomes remain stagnated and their lives are on hold because they cannot unload the properties (and get a sweet deal like Lee did and have the bank and the mortgage holder take a voluntary loss) and move on. 

Well, Senator Lee has moved on. The object lesson here is, sucks to be you if you don't have a Senate seat to fall back on when things go south. He has four more years to start making deals and to start raising millions in campaign contributions. His connections guarantee him this payday. If his Senate career survives past his next re-election campaign, he can look at being a millionaire with as many homes as he wants when his twelfth year in the Senate is up. I'm sure he's crying like a baby over all of this.

Do you think Senator Lee is going to start writing legislation that will make things easier for people in his situation? No, he's from the party that thinks that your problem with your mortgage is because you're a lazy sinner who is getting what you deserve, so pull yourself up by your own bootstraps and win your own Senate seat, sucker.

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